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After the success of the company's first two months, Santana Rey continues to operate Business Solutions. The November 30, 2021, unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2021) follows. Account Title Debit Credit Number 101 Cash $ 39,264 106 Accounts receivable 13,018 126 Computer supplies 2,645 128 Prepaid insurance 2,160 131 Prepaid rent 3,040 163 office equipment 8,500 $0 164 Accumulated depreciation-Office equipment 167 Computer equipment 23, 200 168 Accumulated depreciation-Computer equipment 0 201 Accounts payable 0 210 Wages payable 0 236 Unearned computer services revenue 0 307 Common stock 70,000 0 318 Retained earnings 319 Dividends 5,600 403 Computer services revenue 32,909 612 0 Depreciation expense-Office equipment Depreciation expense-Computer equipment 613 0 623 Wages expense 2,275 637 Insurance expense 0 640 Rent expense 0 652 Computer supplies expense 0 655 Advertising expense 1,668 676 Mileage expense 634 677 Miscellaneous expenses 190 684 Repairs expense-Computer 715 901 Income summary 0 Totals $ 102,909 $ 102,909 Business Solutions had the following transactions and events in December 2021. December 2 Paid $925 cash to Hillside Mall for Business Solutions's share of mall advertising costs. December 3 Paid $470 cash for minor repairs to the company's computer. December 4 Received $4,050 cash from Alex's Engineering Company for the receivable from November. A
December 2 Paid $925 cash to Hillside Mall for Business Solutions's share of mall advertising costs. December 3 Paid $470 cash for minor repairs to the company's computer. December 4 Received $4,050 cash from Alex's Engineering Company for the receivable from November. December 10 Paid cash to Lyn Addie for six days of work at the rate of $120 per day. December 14 Notified by Alex's Engineering Company that Business Solutions's bid of $7,700 on a proposed project has been accepted. Alex's paid a $2,500 cash advance to Business Solutions. Purchased $1,400 of computer supplies on credit from Harris Office Products. December 15 December 16 Sent a reminder to Gomez Company to pay the fee for services recorded on November 8. December 20 Completed a project for Liu Corporation and received $5,975 cash. December 22-26 Took the week off for the holidays. December 28 Received $3,600 cash from Gomez Company on its receivable. December 29 Reimbursed S. Rey for business automobile mileage (400 miles at $0.29 per mile). December 31 Paid $1,300 cash for dividends. The following additional facts are collected for use in making adjusting entries prior to preparing financial statements for the company's first three months. a. The December 31 inventory count of computer supplies shows $590 still available. b. Three months have expired since the 12-month insurance premium was paid in advance. c. As of December 31, Lyn Addie has not been paid for four days of work at $120 per day. d. The computer system, acquired on October 1, is expected to have a four-year life with no salvage value. e. The office equipment, acquired on October 1, is expected to have a five-year life with no salvage value. f. Three of the four months' prepaid rent have expired. Required: 1. Prepare journal entries to record each of the December transactions. Post those entries to the accounts in the ledger. 2-a. Prepare adjusting entries to reflect a through f. 2-b. Post the journal entries to record each of the December transactions, adjusting entries to the accounts in the ledger. 3. Prepare an adjusted trial balance as of December 31, 2021. 4. Prepare an income statement for the three months ended December 31, 2021. 5. Prepare a statement of retained earnings for the three months ended December 31, 2021. 6. Prepare a classified balance sheet as of December 31, 2021. 7. Record the necessary closing entries as of December 31, 2021. 8. Prepare a post-closing trial balance as of December 31, 2021.
Required 1 Required 2A Required 2B Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Prepare journal entries to record each of the December transactions. Post those entries to the accounts in the ledger. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet No Date General Journal Debit Credit 1 December 02 Advertising expense Cash 2 December 03 Repairs expense-Computer Cash 3 December 04 Accounts receivable 4 December 10 5 December 14 6 December 15 1 Cash Wages expense Cash Cash Unearned computer services revenue Computer supplies Accounts payable 925 470 4,050 720 2,500 1,400 925 470 4,050 720 2,500 1,400
Required 1 Required 2A Required 2B Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Prepare adjusting entries to reflect a through f. (If no entry is required for a transaction/event, select "No journal entry require first account field.) View transaction list View journal entry worksheet No General Journal Debit Credit 1 Computer supplies expense Computer supplies 2 Insurance expense Prepaid insurance 3 Wages payable 4 Depreciation expense-Computer equipment Accumulated depreciation-Computer equipment 5 Depreciation expense-Office equipment Accumulated depreciation Office equipment 6 Rent expense Prepaid rent < Required 1 Transaction a. b. C. d. e. f. Wages expense Required 2B > 3,455 540 480 1,450 425 2,280 3,455 540 480 1,450 425 2,280 X
Post the journal entries to record each of the December transactions, adjusting entries to the accounts in the ledger. 101: Cash 106: Accounts Receivable Date Credit Balance Date Debit Credit December 01 December 01 December 02 December 04 December 03 December 28 December 04 4,050 December 10 December 14 2,500 December 20 5,975 December 28 3,600 December 29 December 31 126: Computer Supplies Debit Date Credit December 01 December 15 1,400 December 31 131: Prepaid Rent Debit Date December 01 December 31 2,280 164: Accumulated Depreciation Office Equipment Date Debit Credit December 01 December 31 425 168: Accumulated Depreciation-Computer Equipment Date Debit Credit Balance December 01 December 31 210: Wages Payable Debit Date Debit 925 470 720 116 1,300 3,455 Credit 1,450 Credit 39,264 38,339 37,889 41,919 41,199 43,699 49,674 53,274 53,158 51,858 Balance 2,645 4,045 590 Balance 3,040 760 Balance 0 425 0 1,450 Balance 4,050 3,600 128: Prepaid Insurance Debit Credit 163: Office Equipment Debit Credit 167: Computer Equipment Debit Credit 201: Accounts Payable Debit Credit 1,400 236: Unearned Computer Services Revenue Debit Credit Date December 01 December 31 Date December 01 December 31 Date December 01 December 31 Date December 01 December 15 December 31 Date 540 Balance 13,018 8,968 5,368 Balance 2,160 1,620 Balance 8,500 Balance 23,200 Balance 0 1,400 Balance
319: Dividends Date Debit December 01 December 31 1,300 December 31 6,900 612: Depreciation Expense-Office Equipment Date Debit Credit December 01 December 31 425 December 31 623: Wages Expense Debit Date December 01 December 10 720 December 31 480 December 31 640: Rent Expense Date Debit December 01 2,280 December 31 December 31 655: Advertising Expense Date Debit Credit December 01 December 02 925 December 31 677: Miscellaneous Expense Date Debit Credit December 01 December 31 Credit Credit 425 3,475 Credit 2,280 2,593 190 Balance 5,600 6,900 0 Balance 0 425 0 Balance 2,275 2,995 3,475 0 Balance 0 2,280 Balance 0 1,668 2,593 0 Balance 190 0 403: Computer Services Revenue Debit Credit 1,450 Date December 01 December 20 5,975 December 31 38,884 613: Depreciation Expense-Computer Equipment Date Debit Credit December 01 December 31 1,450 December 31 637: Insurance Expense Date Debit Credit December 01 December 31 540 December 31 540 652: Computer Supplies Expense Date Debit Credit December 01 December 31 3,455 December 31 676: Mileage Expense Date Debit December 01 December 29 116 December 31 750 684: Repairs Expense-Computer Date Debit Credit December 01 December 03 470 December 31 3,455 Credit Balance 1,185 32,909 38,884 0 Balance 1,450 0 Balance Balance 0 0 540 Balance Balance 0 3,455 0 0 634 750 0 715 1,185 0
Prepare an adjusted trial balance as of December 31, 2021. BUSINESS SOLUTIONS Adjusted Trial Balance December 31, 2021 Account Title Debit Cash Accounts receivable Computer supplies Prepaid insurance Prepaid rent Office equipment Accumulated depreciation-Office equipment Computer equipment Accumulated depreciation-Computer equipment Accounts payable Wages payable Unearned computer services revenue Common stock Retained earnings Dividends Computer services revenue Depreciation expense-Office equipment Depreciation expense-Computer equipment Wages expense Insurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expenses Repairs expense-Computer Totals $ 0 S Credit